S2 #2: Why The Apple Watch 4 Was the Best Thing For AliveCor with Dave Albert

Dave Albert joined me on the podcast this week to talk about startups, entrepreneurs, and health tech innovation. Dave innately understands the challenges and opportunities that come with developing life-saving technology.

Eventually, his inventive side led him to leave his profession as a physician to push innovation. Join me as we learn from his over 30 years of experience in health care and HIT inventions.

Backstory

Dave started inventing health tech before it was cool. He graduated with a degree from Harvard and then went to medical school at Duke, eventually wrapping up at Duke with a graduate degree in biomedical engineering.

During his time in North Carolina, he got his first taste of inventing. While there in 1983, he acquired his first patent - one of the first heart rate monitors in the form of a wristwatch. This was long before Apple Watch or even Palm Pilots existed. He truly is a forward-looking inventor.

By the time he became a cardiologist in Oklahoma, he already had two patented inventions, leading him to leave medical practice for good in the late 1980s so he could drive HIT innovation in the health care space.

And now he’s the founder of the world’s leading wearable ECG system - AliveCor.

Why cardiovascular monitoring?

If you haven’t noticed already, Dave is fascinated by the heart, and that’s not an accident. Like many involved in digital health his inspiration to start AliveCor began with a life-changing event.

When he was in 6th grade, his dad survived a heart attack. This led Dave to learn everything he could about the heart, and he couldn’t have picked a better time. Health care was experiencing major leaps in cardiac innovation as the first successful heart transplant was completed by Bernard Christianson.

And that’s why Dave has had a lifelong fascination with the simple but elegant pump that works from birth until death.

AliveCor: It started before it started

Long before AliveCor, Dave started a company called Data Critical which sold to GE Healthcare in 2001. Around the time he was founding this company (1995-1996), he was inspired by newly invented portable computers. He believed patients needed a personal device that allowed them to monitor and share ECG data with their physician.

He even got a patent on the idea and a 501(k). The early invention, he attests, was a mess, but it showed a glimmer of hope that would become a reality 15 years later. In this he reminds me of a modern day Thomas Edison who said, “I haven’t failed -- I’ve just found 10,000 [lightbulbs] that won’t work.”

Fast forward to 2007. Steve Jobs did his famous “one more thing...” speech which, of course, revealed the first generation iPhone. Dave was intrigued. Then 18 months later, Apple opened up development through their app store.

How smartphones impacted innovation

Dave jumped at the opportunity. He called a friend who initially told him that the idea wouldn’t work because of all the iPhone regulations and restrictions. But Dave was relentless. For the next 3 years, they worked on the idea, raised money, and developed the first prototype.

Then on December 14, 2010, he received 15 prototype cases in the mail. A couple weeks later he had his son show him how to make and publish a YouTube video. He planned to send this video to three companies who wouldn’t be at the upcoming Consumer Electronics Show (CES) (at which he was going to be giving a keynote).

Going from obscure to viral

But as he published the video, he inadvertently clicked a LinkedIn button that allowed him to share the video with all his followers. The next day he got an email from one of his friends who helped him develop the prototype saying they needed to talk as soon as possible.

His friend informed him that the video had 150,000 views (that soon grew to over 500,000 views). That weekend he received calls from Good Morning America and Fox wanting him to be on their CES show. All this to say, his video and heart rate monitor went viral.

After receiving calls from prominent tech and medical companies such as GE, he soon received enough funding from investors like Mayo Clinic to start AliveCor.

Wide acceptance from the medical community and consumers

The initial devices were sold to veterinarians because there aren’t any FDA regulations for these clinics. Then, because he had already published a paper on the device, he received FDA clearance in 70 days.

According to him, his invention far exceeded his initial expectations, and now every major cardiac center in the US uses this system. AliveCor’s business model is unique because it’s not a consumer product. It’s a medical product that consumers can also buy.

In other words, it’s used in mainstream medicine, but it’s also available for individual purchase on Amazon for around $99.

Growth and development

As smartphones and wearables have grown and changed, so has AliveCor. The initial model was a phone case for iPhone 4. But it quickly became apparent that while many in the US used iPhones, most of the world (around 80%) used Android and didn’t have access to a medical device like this.

Then iPhone kept changing their models and sizes, making it difficult to keep phone cases up to speed with the rest of the smartphone industry. That’s when AliveCor took on a more universal form and introduced KardiaMobile.

What to do when the world’s biggest company decides to compete with you

Everything was going well for AliveCor, and then Apple released iWatch series 4. Dave said that at the beginning of September that year he thought AliveCor would go under. But the opposite actually happened.

AliveCor’s sales increased by 60% that year, and they’ve continued to grow since then. The reason? Most of the people around the world use Android and didn’t want to switch to Apple products. Yet Apple’s release of a heart rate monitoring watch put the spotlight on AliveCor whose technology can easily integrate with almost any smartphone worldwide.

What Dave learned is that when the big guys come after a startup, it’s important to remember that those mammoth companies also have competitors. That means one of your best strategies is to buddy up to one of their competitors.

When the world’s biggest company validated Dave’s idea, other companies like Samsung, Microsoft, and Google realized they had to get this technology and fast. For startups this is a great opportunity because you already have the technology and know how.

In the case of wearable heart monitors, Apple’s competitors couldn’t afford to take 3 years to innovate the technology. Instead, they often look for partnerships with smaller companies who already have the tech capabilities. And that’s why Alivecor has flourished since the release of iWatch series 4.

What sets Alivecor apart

Alivecor isn’t going anywhere, and the reason for this is simple. Unlike newer heart rate monitors, they have 40+ million ECGs that they can use to develop deep learning and AI solutions. In other words, they’re miles ahead of others in the area of analytics, allowing them to evolve with their users and predict future trends.

In addition, Alivecor has taken steps to remove any barriers that would prevent implementation in medical fields. Their development of KardiaPro, a HIPPA compliant web portal, allows clinicians to view patient ECG data while adhering to privacy regulations.

Getting medical expertise and FDA clearance

Dave noted that startups introducing innovation into clinical solutions will need FDA approval as well as acceptance from the medical community. You simply cannot make it long-term unless you get the acceptance of both.

His solution is to either get a partner who knows how to navigate the medical side of things or to get a consultant who can help you navigate the regulatory system.

Often, partners won’t demand cash; they’ll want equity. Consultants will need compensation (and a lot of it). This will often inform what kind of solution you should take when seeking to gain credibility in the medical community.

What do most people get wrong?

Dave shared that tech startups typically do a great job of developing tech solutions, but often they don’t understand or don’t prioritize clinical validation.

If you ever want your solution to be accepted, however, it has to be validated through traditional methods to the medical community - academic presentations, peer review presentations and papers, clinical research, IRBs, test subjects, and so on and so forth.

Your ultimate success depends on how well you can prove your solution because no one will take your word for it, especially since lives are at stake.

Must-read book

As a sci-fi fan and biography addict, Dave has two book recommendations. First, he learned a lot from Steve Jobs’ biography. There’s much entrepreneurs can learn from Jobs’ struggles and success in the tech industry.

And, secondly, Dave recommends the book I, Robot - a compilation of short stories turned into a novel.

Also, Dave’s son, Dr. Michael Albert, has a podcast called Impossible Healthcare. Be sure to check it out for the inside scoop on what is changing and what needs to change in health care.